The Aging Population and the Future of Social Security

In the bleak futuristic film Children of Men, the world’s population has been afflicted with an unnamed condition that means women can no longer become pregnant- the population is aging and there are no more younger people around to take up the slack. While the film is the product of a Hollywood screenwriters imagination, the world is already dealing with an aging population, and the problem is only going to get worse. Many countries have disproportionately low birth rates, and Japan is particularly heavily affected by this. Germany is looking to relax their immigration laws for skilled migrants, and there are calls to relax their overall immigration laws, essentially overcoming low birth rates with controlled migration. An older population can be difficult to manage when it comes to social security, and many governments are looking at different ways to overcome this problem, with varying degrees of success and popularity. So what is the future of social security, and how will it affect you?

Retiring Later

The UK has announced measures to put back the standard retirement age from 65 to 70 years old, meaning that a citizen will need to be employed for five more years before they can start to receive government benefits. This is a logical solution, and with the rapidly increasing cost of living in the developed world, many people were delaying retirement for a few years anyway, although when this becomes mandatory, people might delay even further, and work until their early or mid 70’s. Government benefits for those who are at or over retirement age comprises £111 billion of the £202 billion social welfare budget, so changes were necessary to cover the increased life expectancy of UK citizens; an expectancy which will be increased for future generations.

Start Saving

In an ideal world, a person will have saved sufficient funds to pay for themselves after retirement, which puts less pressure on a country’s finances, as well as giving the person a better quality of life than if they were solely dependant on social security. Australia encourages its citizens to save for retirement, and it’s mandatory for employers to pay into a superannuation (retirement) fund when they take on an employee in any capacity- so when a 16 year old takes an after school job, they’re already saving for their retirement. The US 401K works in a similar way, and yet many aspects of the 401K are optional, and US citizens aren’t being forced to save in the same way as their Aussie counterparts.

If You Need Benefits

While it can be extraordinarily helpful to have saved up a significant nest egg for retirement, whether you retire at 65 or even 70, you may still have a reliance on government benefits, and this is your right- after all, you’ve paid taxes your whole working life. It can be difficult to ascertain just what you’re entitled to, as there are many variables in the amount you might receive, such as your tax bracket, your marital status and any disabilities. While the government isn’t going to deliberately short change you, you might not automatically receive everything that you’re entitled to, and it can be a good idea to use the services of a social security lawyer who can help you to navigate your way through the bureaucracy and get everything that’s available to you. Low birth rates are of a particular concern; since fewer taxpayers in the future make it more difficult to fund social security, so perhaps one of the best ways to plan for your retirement is to have children. And then at least you’ll have someone to look after you in your golden years…